Gold monetization scheme
The Gold Monetization Scheme (GMS) is a government-backed program introduced by the Government of India to mobilize the idle gold held by households and institutions in the country. Launched in 2015, the scheme aims to reduce the country’s reliance on imported gold and put the precious metal to productive use.
Key Features of the Gold Monetization Scheme:
1. Deposit Gold: Under the GMS, individuals and institutions can deposit their physical gold, including jewelry, coins, and bars, with banks authorized by the Reserve Bank of India (RBI). These deposits can be made in both short-term (1-3 years) and long-term (5-7 years) tenures.
2. Earning Interest: Depositors receive interest on their gold deposits. The interest rate varies depending on the tenure of the deposit. The interest can be in the form of cash or gold, as per the depositor’s choice.
3. Safety and Security: Gold deposits under the GMS are kept in secure vaults, ensuring the safety of the deposited gold. The gold is also insured against loss or damage.
4. Testing and Purity Verification: The deposited gold is tested for purity and converted into standardized gold bars. The depositor receives a certificate of deposit specifying the quantity and purity of the gold deposited.
5. Redemption: At the end of the deposit tenure, depositors have the option to redeem their gold in the form of cash or physical gold. The redemption is made at the prevailing market rates.
6. Encouraging Gold Recycling: By encouraging individuals to deposit their idle gold, the scheme promotes gold recycling, reducing the need for new gold imports.
7. Supporting the Economy: Utilizing idle gold for productive purposes, such as lending to jewelers and exporters, supports economic activities and reduces the country’s trade deficit by curbing gold imports.
The Gold Monetization Scheme provides individuals with an opportunity to earn interest on their idle gold holdings while contributing to the country’s economic growth. It also supports the government’s efforts to utilize domestic resources effectively and reduce dependence on imports.